Dharshani Construction vs. Sri Lanka Mahaweli Authority – sllr 2021 volume 2 page 373

In the case between Sri Lanka Mahaweli Authority (Plaintiff) and Dharshani Construction (Defendant), the court addressed the issue of when the cause of action accrues for the purpose of prescription following the termination of a contract and a subsequent demand for payment. It was held that the cause of action arose from the date of the demand for payment, not from the date of contract termination, thus the plaintiff’s claim was not prescribed under section 6 of the Prescription Ordinance. This decision reaffirmed the principle that demand and refusal are required for a cause of action involving additional payment to accrue where stipulated by contract. Reliance was placed on the relevant contract clauses and the Prescription Ordinance, confirming that the limitation period commences on t